LITTLE ROCK, Ark. (AP) -- The merger of two aluminum alloy companies in Arkansas and Minnesota has fallen through and a Hot Springs plant will be closed, putting 150 people out of work, company executives said Thursday.
The merger of Arkansas Aluminum Alloys Inc. and Spectro Alloys Corporation seemed a done deal only five months after officials announced in April that they had agreed to merge their assets and form a new, consolidated company, Platts Metal Week reported in September. The companies were waiting for the official closing of financing.
However, Spectro chief executive Michael W. Tryon said Thursday in a telephone interview that both sides have since agreed it would not be wise to proceed with the merger, given the current economic slump.
"Here, recently, it points to a challenging outlook going into '09," Tryon said. "It really just came down to the economy."
Tryon said Spectro would hire some of the Arkansas workers from the Hot Springs plant and purchase scrap metal from A. Tenenbaum Company, the parent company of Arkansas Aluminum Alloys. Also, he said, his company remained interested in a merger once the economy picks up.
"When the economy improves and that landscape presents the right timing, our goal is to go forward with the consolidation in this industry," he said.
The new company was to be called ALX Recycling LLC and based in Rosemount, Minn., where Spectro is headquartered. The financial details were not disclosed.
Thursday, Tenenbaum president and chief executive Jack Grundfest said the plant closing in Hot Springs may be temporary. He said workers were notified the plant would be shut down in late November or early December.
Grundfest said that while the recycling business has been a good industry, prices for metals in the last two months have declined and sales for ingot has slowed. The automotive industry is the primary consumer of Arkansas Aluminum products.
Arkansas Aluminum Alloys dates back to 1975. The plant is the only secondary aluminum smelting plant of Tenenbaum, based in North Little Rock. Grundfest said Tenenbaum's metals recycling plants in Berryville, Harrison, Jonesboro and North Little Rock are not be affected by the failed merger.